JS Mill on compensation to slave owners

In a previous posting I asked under what situations should compensation be paid for changes in government policy. One case I asked about was,

Consider the situation of salve owners at the time the British government declared slavery illegal. The salve owners previously legal business was just shut down by an arbitrary decision by the government. The slave owners suffered a very large loss because of the government's decision. Should they have been compensated?

John Stuart Mill wrote this on the topic in his text "Principles of Political Economy":

[Ilniquitous as ... [“property in human beings”] is, yet when the state has expressly legalized it, and human beings, for generations, have been bought, sold, and inherited under sanction of law, it is another wrong, in abolishing the property, not to make full compensation.

So what was Mill's argument for compensation? The following comes from a paper "Reparations for Emancipation: Mill's Vindication of the Rights of Slave Owners" by Dale E. Miller, The Southern Journal of Philosophy, Summer 2005, Volume 43, Issue 2, pages 245-65:

3.1. Mill’s Argument

Mill’s assertion that slave owners are owed fair compensation when their slaves are freed is no mere whim on his part. It appears not only in all seven editions of the Principles of Political Economy, a work that changes substantially over the years as his views evolve, but also in a number of his other writings. The idea did not appear so strange in his day as it might today. British slave owners in the West Indies were paid some twenty million pounds for their slaves in 1833. Some American slave owners were compensated as well; in 1862 Congress appropriated one million dollars for this purpose when it ended slavery in the District of Columbia. Abraham Lincoln’s “Preliminary Proclamation,” issued 22 September 1862, called for compensating all slave owners loyal to the Union who freed their slaves, and Congress passed a resolution that same year calling on the federal government to compensate any state that undertook a gradual abolition of slavery for the “inconveniences, public and private, produced by such a change of system”

Political support for compensating slave owners may have been motivated in part by an obvious pragmatic consideration; it may have looked like the easiest way for a nation to end slavery quickly and, at least in the United States, without bloodshed. Mill, in contrast, considers “emancipation without compensation” to be not merely inexpedient but a “flagrant injustice.” The fact that he does not argue for this contention suggests that his reasons for advancing it are not overly complicated or obscure. Although he never explicitly formulates it, he clearly subscribes to a principle of justice that calls upon the state to compensate citizens when it deprives them of property that they legally acquired and held. For example, at one point in the Principles Mill says that the division of large Irish estates, with cottier tenants being converted into landowning peasants, would only be acceptable subject to the proviso that those who lost land received “its pecuniary value, or an annual income equal to what they derived from it.” He seems to regard the state’s obligation to compensate slave owners when it abolishes slavery as one more straightforward consequence of this principle. Drawing on language from American constitutional law, we can call this the “takings principle.”

One may want to object immediately that the takings principle is irrelevant here because human beings are not in fact property. Mill would agree that, in the most profound sense, this is true. Yet apparently he interprets the takings principle so that it applies whenever the state has allowed people to treat something as if it were property. To understand why he interprets the principle in this way, it is necessary to examine his particular reasons for subscribing to it. In the framework of Mill’s utilitarianism, the obvious place to find theoretical support for the takings principle is an even more fundamental principle of justice, one that he does state explicitly.

[Ilt is confessedly unjust to break faith with any one: to violate an engagement, either express or implied, or disappoint expectations raised by our conduct, at least if we have raised those expectations knowingly and voluntarily....

In other words, once one has freely encouraged others to form expectations about one’s future behavior and to base their plans around these expectations, one has an obligation to follow through. This might be called the “expectations principle.” Mill takes this to be one of the weightiest principles of justice, because violations of it have especially detrimental effects on our happiness.

The important rank, among human evils and wrongs, of the disappointment of expectation, is shown in the fact that it constitutes the principal criminality of two such highly immoral acts as a breach of friendship and a breach of promise. Few hurts which human beings can sustain are greater, and none wound more, than when that on which they habitually and with full assurance relied, fails them in the hour of need ....

The expectations principle entails that if the government has knowingly and voluntarily encouraged citizens to expect to retain property they have acquired, then it has an obligation to let them do so. Two more premises are needed to get from this to the takings principle. The first is that by making it legal for citizens to own a certain type of property, the state is encouraging them to believe that this will remain legal into the future. The second is that when one violates another’s rights one must fairly compensate them. Mill takes both of these premises for granted-and while more may need to be said about the first, the second probably can be safely assumed. If the takings principle is derived from the expectations principle, then it comes into play whenever the state has knowingly and voluntarily encouraged citizens to rely upon something’s being legally regarded as property.

So Mill apparently reasons from the abstract expectations principle to the more concrete takings principle. From the takings principle, then, he concludes that the state must compensate slave owners upon abolition. There is an inference involved in calling this Mill’s argument, since he never spells it out himself, but it seems like a safe one; he clearly accepts the argument’s premises, and it is thoroughly congruent with his utilitarianism. Perhaps neither step in the argument is as straightforward as he thinks, but if it fails then it is not obvious where. (p. 250-2)

So there is an argument for the compensation of (ex)slave owners, a "takings" argument, which may sound strange - especially as it comes from a well known anti-slavery campaigner, but as Miller notes if the argument fails its not obvious where. Actually the next section in Miller's paper considers objections to Mill's argument.